Please see below for a brief overview of the information included in our First Quarter Eastside Office Market Report.
While the absorption for the quarter was negative, overall activity is beginning to pick up in most of the Eastside submarkets outside of downtown Bellevue. Both the lack of large blocks of space and the dramatic increase in rental rates of Bellevue CBD have resulted in tenants focusing on more cost effective options with free parking in the immediate areas surrounding downtown. Much of the activity has focused on smaller users, as there have been a very limited number of larger (20,000 sf+) tenants seeking office space.
Moving into the second quarter we continue to forecast slow and steady improvement in all sub-markets. Given the relative lack of large blocks of space (with I-90 the glaring exception) vacancy rates will get back on track to continue their gradual but continual descent. Rental rate increases will be modest and restricted from large spikes until tenant activity intensifies and vacancy rates drop further.